Senate approves bill cutting corporate taxes by $136 billion

[BrainGlutton]

From the St. Petersburg Times, 10/11/04 – http://hosted.ap.org/dynamic/stories/C/CONGRESS_RDP?SITE=FLPET&SECTION=HOME&TEMPLATE=DEFAULT:

WASHINGTON (AP) – The Senate shipped President Bush a wide-ranging $136 billion corporate tax-cut bill and a disaster aid package on Monday, letting lawmakers head home for the finale of the presidential and congressional campaigns.

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The tax bill, which the Senate approved 69-17, began as an effort to help U.S. exporters avoid European tariffs. But as Republican leaders hunted for votes, it swelled into the most profound rewrite of the corporate tax code in two decades.

The final 633-page product pared taxes for interests ranging from major manufacturers to native Alaskan whalers and ethanol producers. Other winners included fishing tackle box makers, NASCAR track owners, Chinese ceiling fan importers, and foreigners winning bets at U.S. horse and dog racing tracks.

<snip>

The White House has signaled that Bush will sign the legislation. But the administration kept a low profile as the bill progressed, underscoring the controversy enveloping some provisions.

<snip>

The Senate toiled into Monday as Democrats used delaying tactics to protest the removal of items from the original Senate version. These included provisions allowing federal regulation of tobacco, blocking Bush administration rules on overtime pay, and cutting taxes for companies that pay workers who are reservists and are called to active duty.

“The conferees chose ceiling fans over businesses saving jobs of our National Guard and reservists,” said Sen. Christopher Dodd, D-Conn.

In the end, the Senate approved separate bills on tobacco, overtime and reservists’ pay. House passage seemed doubtful.

Though the tax bill would cut business taxes by $136 billion over the next decade, it claimed to raise an equal amount of revenue by increasing other taxes, including stricter rules governing the deduction for cars contributed to charities.

Supporters said the bill would create jobs - the loss of which during the Bush administration has become a campaign issue. Sen. Max Baucus, D-Mont., who helped write the measure, said 200,000 U.S. manufacturing firms would benefit.

See also the New York Times, http://www.nytimes.com/2004/10/11/business/11CND-TAX.html?hp&ex=1097553600&en=3de4947a2f1bfd03&ei=5094&partner=homepage (registration required but free).

Is this a good or bad idea? How will it affect the economy? And the budget deficit?

[BrainGlutton]

There’s a headline story in the St. Petersburg Times today (10/12/04) (I’d link to it but it doesn’t seem to be on the paper’s website) stating that under this new tax bill, residents of states where (as in Florida) there is a state sales tax but no state income tax will now be able to deduct their sales tax payments from their federal income tax. “Those living in states with a state income tax can choose between keeping the deduction on their state income or deducting state and local sales taxes instead.” This deduction will last until 2006 unless Congress extends it.

I guess I should be glad – but what am I supposed to do now? Save my receipts from every single little retail purchase I make?